Covid-19

Joshua Hausman, Paul W. Rhode, Johannes Wieland, 29 November 2020

Like the current economic crisis in the US, the Great Depression led to large redistributions of income among sectors and households. Perhaps most important, falling farm product prices shifted income away from farmers. This column argues that this redistribution explains between 10% and 30% of the US output decline in 1930. Recovery from the Great Depression began in 1933 in part because farm product prices rose, reversing this redistribution. 

Federico Di Pace, Luciana Juvenal, Ivan Petrella, 28 November 2020

The abrupt movements in commodity prices at the onset of the Covid-19 crisis have reignited policymakers’ concerns over movements in the terms of trade. The shock has certainly confirmed that terms of trade are very volatile and extremely sensitive to changes in global economic activity. This column argues that these terms of trade shocks are likely to have a persistent impact on the business cycle of developing economies, which are particularly vulnerable to fluctuations in the price of their exports.  

Jean-Paul Renne, Guillaume Roussellet, Gustavo Schwenkler, 26 November 2020

Could restrictions at the federal level have slowed the spread of COVID-19 in the US? This column addresses this question using a novel, multi-region epidemiological model that calculates the number of deaths that would have resulted from the federal government mirroring the policies of those states with the earliest and most rigorous restrictions. It finds that by late September 2020, more than two-thirds of the country’s COVID-19 deaths could have been prevented,highlighting the need for unified action from state and federal regulators.

Simeon Djankov, Eva (Yiwen) Zhang, 26 November 2020

The rebound in jobs for men in the US was swift after the initial weeks of the Covid pandemic, but not so for women. This column highlights three areas for change to alleviate the burden on working women in the US. First, legal changes are needed to both federal and state-level regulation, with a particular focus on parental leave and pension rules. Second, vocational training incentives with a particular focus on women are needed. Third, future recovery programmes may do well to take the actual gender pay gap – factoring in unpaid work that women do in the household – into consideration.

Ethan Ilzetzki, Benjamin Moll, 25 November 2020

On 5 November, the UK entered its second lockdown in an attempt to contain the spread of Covid-19. This column reports on the latest CfM survey, in which the majority of the panel of assessed that lockdowns have caused limited economic damage beyond what the pandemic itself would have caused unabated, and that the economic costs of the current lockdown are limited relative to the milder measures employed this summer. Nearly a fifth of the panel believes that the UK economy is in fact better off due to lockdowns, beyond the public health benefits of these measures. About a third of respondents believes that no trade-off exists between lives and livelihoods and that health and economic outcomes in fact go hand in hand, especially when better policies are taken into account, a third believes there is a small trade-off, and the remaining third that the trade-off is larger.

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